Citadel’s Ken Griffin says the Fed shouldn’t cut too quickly, citing big tailwinds supporting inflation

Ken Griffin, the founder and CEO of the investment firm Citadel, believes the Federal Reserve should be cautious in its plans to cut interest rates to combat inflation.

In a recent conference, Griffin advised that the Fed “not cut too quickly” because this could lead to an unpredictable pattern of rate changes and economic instability.

Griffin’s concerns stem from the ongoing high level of inflation in the US economy.

Despite a slight decrease in inflation since mid-2022, it remains significantly above the Fed’s desired goal of 2%.

Griffin attributes this inflation to sustained government spending and a shift towards deglobalization, which is putting upward pressure on prices.

The Fed has signaled its intention to lower interest rates at some point this year.

However, Griffin believes this decision should not be rushed in light of persistent inflationary pressures.

He emphasizes that a premature rate cut, followed by a potential reversal to higher rates, would have severe consequences for the economy.

Griffin’s cautious stance highlights the complexity of the Fed’s situation.

The central bank must balance the need to control inflation without triggering an economic slowdown or market volatility.

The upcoming Fed meeting next week will be closely watched by investors and policymakers alike as they await the Fed’s latest assessment and guidance on interest rate policy.